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Good practices of initiative:

Industrial Free Zone Development Project Dominican Republic

Relevance
It measures the alignment of the initiative with existing policy frameworks in the country. In addition, the scalability of the initiative to other realities and geographies is valued.
Framework Description Ambit Country Source
Promotion of Free Zones-Dominican Republic The project was aligned with the Dominican Republic's national strategy to promote exports and job creation through the development of export processing zones. The Project responded to pressing long-term financing needs in the dynamic free zone sector, while gradually working towards fundamental economic reforms at the national level. National Dominican Republic Link
Effectiveness
This measures how well the objectives and goals set out in the initiative were fulfilled, as well as the extent to which the results achieved are attributable to the actions implemented by the initiative.
Indicator Description Indicator Type Measure Unit Base date Base Goal Measure Date Measure Compliance Source
Job creation in export processing zones Results Number of jobs 30-03-1989 80,000 empleos (empleos existentes en 1988 antes del proyecto) No específica 28-06-1996 33,000 nuevos empleos creados 100 World Bank Implementation Completion Report No. 16604
Increase in net exports Results Millions of US dollars per year 04-12-1989 $96 millones (exportaciones netas anuales en 1988) No específica 28-06-1996 $52 millones de aumento en exportaciones netas anuales 100 World Bank Implementation Completion Report No. 16604
Efficiency
Efficiency is the assessment of whether a public intervention achieves its objectives while using resources in a way that the costs incurred are proportional to the economic, social, or environmental benefits obtained.
Indicator Description Indicator Type Measure Unit Base date Base Goal Measure Date Measure Compliance Source
Economic Rate of Return (TER) Efficiency Percentage (%) 1989-03-30 12% 17.7% Link
Total investment mobilised Efficiency Millions of US dollars 1989-03-30 $49.6 millones $53.3 millones Link
Sustainability
It measures the installed capacities or actions identified to maintain or improve the results of the policy initiative.
Indicator Description Indicator Type Measure Unit Base date Base Goal Measure Date Measure Compliance Source
Sustainability 1989-03-30 Fortalecimiento del Consejo Nacional de Zonas Francas y FIDE (Banco Central) Mejoras significativas en la capacidad de gestión, modernización de sistemas y procedimientos. Link
Environmental monitoring capability Improved capacity to monitor environmental impacts of free zones. Sustainability Qualitative 1989-03-30 Capacidad limitada de monitoreo ambiental Mejora en la capacidad de monitoreo ambiental Mejorada pero no evaluada explícitamente Partial Link
Employment of low-income women Job creation for low-income women in free zones. Impact Number of jobs 1989-03-30 N/A No cuantificada. Mayoría de los 33,000 nuevos empleos 100% Link
Rates of return on investments in individual free zones. Economic profitability of investments in free zones. Sustainability Percentage (%) 1989-03-30 0 12% Entre 12.1% y 26.2% para subproyectos individuales 100% Link
Learned lessons
Gained knowledge from implementing, evaluating, and managing a policy intervention, including why it was or was not effective and how it could be improved in the future.
Lesson Description Source
Private sector investment projects, including enclaves such as export processing zones, cannot realize their full potential in the absence of sound sectoral policies. Private investors in this project suffered and will continue to suffer due to the underdeveloped state of the local financial system and the reliance on a undercapitalized banking system to finance capital-intensive investments. The potential to use the growth of free zones to support broader productive development remains unrealized because industrial sector policies restrict the integration of domestic factors into the export sector. The need for reform of the financial and industrial sector has become even more urgent with the advent of NAFTA and increased global competition for investment in free zones based on low-cost labor. Link
Strong basic project management planning is critical. The project design should have foreseen from the outset training programs for capacity building in the Bank's implementation processes (procurement, disbursements, financial management) and a clear work plan with provisions for monitoring and evaluating the effectiveness of the activities financed by the project. The lack of these minimum conditions for effective project management caused inevitable drift periods offset by efforts (usually) instigated by the Bank to keep the project on track. Better project management planning would have accelerated project activities and contributed to the institutional strengthening of FIDE and CNZF. Link
In future Bank operations in the Dominican Republic, implementation planning and capacity building should be explicit elements during project preparation. Relatively few Bank operations have historically been implemented in the country, and the Bank's procedures remain largely unknown. Specific training and detailed planning are required to ensure effective and sustainable implementation of projects. Link
It validates the soundness of the Bank's current policies regarding the need for sound financial sector management as a precondition for investment credit operations. The lack of full appreciation of the timeliness of addressing financial sector shortcomings undermined the timely achievement of the project's achievements. The Bank would not embark on future operations in the industrial sector without fundamental changes in the management of the financial sector. Link